The overhaul of the business rates regime which took place in April 2017 has been plagued by criticism over the huge overnight increases in bills that many businesses faced. Last month’s Budget contained two key announcements that aim to keep future rises in check.
First, the Chancellor confirmed that the measure of inflation which is used as part of the calculation for determining a business’ rates liability will switch from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI). Historically, the RPI tends to measure inflation at a higher rate than the CPI, so this change is potentially good news for rates payers.
Secondly, the period between future business rates revaluations will be reduced from every five years to every three years. The perceived benefit of shorter revaluation periods is that the valuation changes during these periods should be smaller and this should help businesses manage any increases in their business rates liability.
These Budget announcements show that the Government is still grappling with issues caused by the much heralded business rates overhaul, but is it a matter of too little too late?